Green power success stories take the wind out of Tony Abbott

Germany, the world leader in installing renewable energy, had a moment last month. It was producing so much electricity from solar, wind and biomass that more than half of the country's electricity was flowing from these renewable sources.

There was so much, in fact, that the price of electricity actually fell to zero. And the price kept falling. It went negative. There were times on April 17 when wholesale electricity in Germany was selling for minus 14.91 euros for a megawatt hour. So it wasn't free – it was cheaper than free.

Illustration: John Shakespeare

Tony Abbott won an election promising to help families cut their power bills by getting rid of the carbon tax. He kept his promise. Electricity prices fell by an average of 9 per cent.

If Abbott wanted to, he could help Australians cut their power bills by much more than 9 per cent. The way to do it, as the German event demonstrated, is with more renewable energy.

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Prime Minister Tony Abbott.

But it couldn't happen here, right? Not so. In fact, it has happened here.

There was a day last July when rooftop solar systems sent so much power flowing back into the electricity grid in Queensland that they contributed to a plunge where wholesale electricity prices in that state went negative too, to minus $100 per megawatt hour.

Households didn't see their power bills suddenly go into reverse and start collecting cash, unfortunately. Because these fluctuations happen in the wholesale market, where prices are constantly changing, while retail customers get their power tariffs set for a year at a time.

South Australia has its moments as well. On average, 40 per cent of the state's electricity is from solar and wind, and on occasion it goes to 100 per cent. "If South Australia were a country," says the eminent economist Ross Garnaut, "it would have more wind and solar than any country on earth."

All this progress has happened despite the Abbott government's ambivalence, and sometimes downright hostility, to renewable energy.

The industry was paralysed by political uncertainty when the Abbott government declared that it would not honour Labor's commitment to the Renewable Energy Target.

The Rudd government had mandated that electricity companies get 20 per cent of their energy from renewable sources by 2020, a percentage which it set it at 41 gigawatt hours of electricity based on forecasts at the time.

The Abbott government said that it would keep to 20 per cent as the target, but a falling trajectory of energy use meant that 20 per cent would now equate to only 26,000 gigawatt hours.

The Clean Energy Finance Corporation' chief, Oliver Yates, said that this had set back investment in renewables to its 2002 level: "So we've gone back about 12 years."

After protracted negotiations, the government and Labor this month agreed on a compromise target of 33,000 gigawatt hours. Even this smaller target will still help drive down wholesale electricity prices, and help drive down carbon emissions too, says Garnaut.

But look around. The world energy picture is changing at stunning speed. Of all the countries on earth, which is most closely associated with fossil fuels? It'd have to be Saudi Arabia, the world oil superpower, the biggest exporter in the world.

Yet last week, the Saudi Oil Minister, Ali al-Naimi, told a conference in Paris: "In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don't know when, in 2040, 2050 or thereafter."

For that reason, he said, the kingdom planned to become a "global power in solar and wind energy" and could start exporting electricity instead of fossil fuels in coming years, according to a report in the Financial Times.

"It used to be us, Canada and Saudi Arabia," after the canning of the carbon tax, says Garnaut. "For a while our Prime Minister thought he had a comrade in arms in Canada's Prime Minister", Stephen Harper.

But Canada is now bringing its carbon emissions target into line with that of the US President, Barack Obama. Garnaut points out that a Canadian power utility, the Saskatchewan Power Authority, has just put in place the world's first commercial-scale, retrofitted carbon capture and storage (CCS) power generating system on an existing coal-fired power plant. The CCS system captures and stores 90 per cent of carbon emissions.

The company made this decision because it was more economic than building a new gas-fired plant. "They were driven by Canadian regulations," says Garnaut, "and they are tougher than Obama's regulations on coal-based generators. If we thought Canada was our comrade in arms, we haven't been paying attention.

"Canada has left us now, and it looks like we are going to lose the Saudis."

Yet parts of Australia's power sector are not waiting for a recalcitrant political leadership and are changing with the world. One of the biggest electricity generators in the country, AGL, last month announced that it would "decarbonise" by 2050 and ramp up its renewable energy plans.

"To support the Commonwealth government's commitment to work towards the 2°C goal," to limit global warming, said the firm, "companies such as AGL need to take the lead." Even one of Australia's dirtiest coal-fired firms realises it can't wait for the Abbott government.

The world is moving faster, to cheaper and cleaner renewable energy, than just about anyone had imagined. Especially the Abbott government.